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Azerbaijan manat real effective exchange rate goes up

10 June 2010 11:03 (UTC +04:00)

Baku. Vahab Rzayev - APA-Economics. As of March 1 the nominal effective exchange rate (NEER) of the manat (national currency) rose by 2.6% during January-April, said the Central Bank of Azerbaijan in a report.

At the same time, the NEER for non-oil sector jumped by 20.1% during the same period. Meanwhile, the real effective exchange rate (REER) of the manat went up by 22.5% whereas the rise for non-oil sector increased by 11% during January-April.

The dramatic increase in exchange rate indexes is associated with a change in official rates of foreign currencies against local currency, and low inflation in trade partner countries as a result of the global financial crisis.

The REER is the weighted average of the countryâ€™s currency relative to currencies of major trading partners, and it is calculated by taking into account the countryâ€™s share in a given nationâ€™s foreign trade. As the inflation rate in each country is assumed to broadly indicate the trends in domestic costs of production, the REER is expected to reflect foreign competitiveness of domestic products.